XML 31 R10.htm IDEA: XBRL DOCUMENT v3.21.1
Revenue Recognition
 3 Months Ended
Mar. 31, 2021
Revenue from Contract with Customer [Abstract]  
Revenue Recognition Revenue Recognition
The Company categorizes the revenues received from contracts with its customers by revenue source as we believe it best depicts the nature, amount, timing, and uncertainty of our revenue and cash flow. The following table provides the revenues recognized by revenue source for the three months ended March 31, 2021 and 2020 (in millions):
Three Months Ended March 31,
20212020
Passenger revenue
Passenger travel$625 $1,408 
Loyalty revenue - air transportation45 103 
Other revenue
Loyalty revenue45 51 
Other revenue18 26 
Total revenue$733 $1,588 
TrueBlue® is our customer loyalty program designed to reward and recognize our customers. TrueBlue® points earned from ticket purchases are presented as a reduction to Passenger travel within passenger revenue. Amounts presented in Loyalty
revenue - air transportation represent the revenue recognized when TrueBlue® points have been redeemed and the travel has occurred.
Contract Liabilities
Our contract liabilities primarily consist of ticket sales for which transportation has not yet been provided, unused credits available to customers, and outstanding loyalty points available for redemption (in millions):
March 31, 2021December 31, 2020
Air traffic liability - passenger travel$1,184 $964 
Air traffic liability - loyalty program (air transportation)758 733 
Deferred revenue36 41 
Total$1,978 $1,738 
During the three months ended March 31, 2021 and 2020, we recognized passenger revenue of $237 million and $636 million respectively, that was included in passenger travel liability at the beginning of the respective periods.
The Company elected the practical expedient that allows entities to not disclose the amount of the remaining transaction price and its expected timing of recognition for passenger tickets if the contract has an original expected duration of one year or less or if certain other conditions are met. We elected to apply this practical expedient to our contract liabilities relating to passenger travel and ancillary services as our tickets or any related passenger credits generally expire one year from the date of issuance.
In response to the impact of COVID-19 on air travel, we extended the expiration dates for travel credits issued from February 27 through June 30, 2020 to a 24 month period. Accordingly, any revenue associated with these travel credits, which are deferred in air traffic liability, will be recognized within 24 months. Based on our customers' behaviors and estimates of breakage, we expect $18 million of the outstanding travel credits at March 31, 2021 will be recognized into revenue beyond 12 months. We have, accordingly, reclassified this amount to air traffic liability - non-current on our consolidated balance sheets. Given the change in contract duration, our estimates of revenue from unused tickets may be subject to variability and differ from historical experience.
TrueBlue® points are combined in one homogeneous pool and are not separately identifiable. As such, the revenue is comprised of the points that were part of the air traffic liability balance at the beginning of the period as well as points that were issued during the period.
In April 2020, we executed a pre-purchase arrangement of TrueBlue® points with our co-brand credit card partner for $150 million. The funds have been fully applied to point purchases as of March 31, 2021.
The table below presents the activity of the current and non-current air traffic liability for our loyalty program, and includes points earned and sold to participating companies for the three months ended March 31, 2021 and 2020 (in millions):
Balance at December 31, 2020$733 
TrueBlue® points redeemed
(45)
TrueBlue® points earned and sold
70 
Balance at March 31, 2021$758 
Balance at December 31, 2019$661 
TrueBlue® points redeemed
(103)
TrueBlue® points earned and sold
98 
Balance at March 31, 2020$656 
The timing of our TrueBlue® point redemptions can vary; however, the majority of our points are redeemed within approximately three years of the date of issuance.